Axiomatic continually monitors changes in the benefits landscape in Africa. An example of such, a recently shared note, on the Zambian national health insurance bill that was recently passed into law can be read here: (

On 8 February 2018, President John Magufuli, signed into law the Public Service Social Security Fund Act which proposed the amalgamation of Tanzania’s various social security funds into two entities, the Public Service Social Security Fund (“PSSSF”) and the National Social Security Fund (“NSSF”).

The amalgamation campaign was spearheaded by the Trade Union Congress of Tanzania (“TUCTA”), over the last 6 years, and forms part of the initial stepping stone in the government’s plan to review all legislation perceived to be detrimental to employees.

Prior to the Act, Tanzania operated five social security funds with similar benefits, these included the:

  • Government Employees Provident Fund (GEPF”);
  • Local Authorities Pension Fund (“LAPF”);
  • National Social Security Fund (“NSSF”);
  • Parastatal Pension Fund (“PPF”);
  • Public Service Pension Fund (“PSPF”).

Upon the enactment of the Act, a two-tier system of social security funds consisting of the PSSSF and NSSF, was introduced. The GEPF, LAPF, PPF and PSPF were amalgamated to form the PSSSF, while the NSSF remained untouched. The key difference between the two funds will be the eligibility criteria; the PSSSF will serve the public-sector workforce while the NSSF will be restricted to the private sector workforce.

Under the new legislation, all public-sector employees who are currently contributing members of the NSSF or any of the other repealed social security funds, will be compulsorily transferred to the PSSSF along with their respective retirement savings. Furthermore, going forward, any employees who are employed within the public sector will automatically belong to the PSSSF.

Likewise, all private sector employees contributing to the PPF will have their membership transferred to the NSSF. Any employee who changes employment from the public sector to the private sector will also need to have their membership transferred to the NSSF. Although the Act proposes transfer of membership, it restricts transfer of contributions of members. Private sector employees who are already members of the NSSF will remain on the NSSF and will not be affected in any way.

The transitional period will last for six months from the date of commencement of the Act and may be extended at the Finance Minister’s discretion. All matters and business of the former funds are expected to be wrapped up during this transitional period along with the transfer and vesting of all assets and liabilities.

PSSSF – Public-Sector Employees

The PSSSF has an obligation of ensuring that every public-sector employee receives his/her retirement benefits as and when due. Furthermore, the fund establishes a uniform set of rules, regulations and standards for the administration and payment of retirement pensions and aims to ensure that employees save in order to cater for their livelihoods during old age.

Employer contributions will total 15% while employee contributions will equal 5% – with the total contribution payable amounting to 20% of the employees’ monthly salary.

The PSSSF will provide the following benefits:

Tanzania Social Security Fund Amalgamation Graphic

NSSF – Private-Sector Employees

Around 70% of the Tanzanian workforce is made up of private sector employees with public sector employees accounting for the remaining 30% – based on these statistics and the fact that all private sector employees will need to be transferred from the PPF to the NSSF; a benefits comparison of the two funds is certainly warranted. The benefits offered by the PPF and NSSF are detailed in the infographic below:

Tanzania Social Security Fund Amalgamation Graphic

It is evident that once the private sector employees have been transferred to the NSSF, they will no longer have an education and gratuity benefit, but will now be eligible for a funeral and social health insurance benefit.

Furthermore, there will be slight differences in the way in which benefits are calculated and paid out as follows:

Tanzania Social Security Fund Amalgamation Graphic

Whether the above benefit changes will be beneficial or detrimental to such employees will ultimately depend on the personal circumstances of each employee.

Potential Consequences of the Social Security Fund Restructure

One cannot say with absolute certainty what the potential consequences of the social security fund restructure may be, however, initial schools of thought suggest that the consequences may be dichotomous.

One consequence may be that employers and employees may find it difficult to come to terms with the new setup.

Secondly, those employees who have planned for the future now face an element of uncertainty as their benefits will be changing.

Although there is potential for these negative consequences to materialize, the ultimate goal of the social security fund restructure is to benefit employees.

The restructure should ultimately reduce the high operational and benefit costs that have plagued the social security fund landscape over the last number of years and should enhance the quality of services being offered. This should in turn have a positive impact on employees’ pockets and act as a stabilization mechanism for the economy.

Although employers will initially need to update their payroll processes and systems to account for the restructure, it is hoped that by doing so, the administrative burden will be reduced. This will help to ensure that the benefit payout delays that have been plaguing Tanzanian employees over the last few years, are a thing of the past.

Axiomatic is a firm believer that in order for the restructure to be successful, it is crucial that employee buy in is achieved. This can only be done through adroit change management by educating employees and ensuring that they fully understand the restructure and how it will affect them.

Axiomatic will keep a close eye on any developments and progress being made over the coming months. It will be fascinating to see what materializes and whether or not the restructure is successful in achieving its goals and outcomes; only time will tell.

For more information please contact Kyle Campbell on +27 11 305 1969 or